Seoul to seek ‘harmonious’ solution to trade issues: finance minister

South Korea will seek a “harmonious” solution to pending trade issues with the United States, including Washington’s latest Chips and Science Act, the finance minister said Wednesday.

The remark came after Washington announced details of the act last week that centers on providing subsidies of US$52.7 billion and tax incentives to foreign chipmakers to set up factories in the U.S.

The policy comes with certain conditions, with companies receiving subsidies being banned from investing in chips in China for a decade.

Samsung Electronics Co. and SK hynix Inc., the world’s leading memory chip makers based in South Korea, have significant semiconductor manufacturing operations in China.

During a session with U.S. businesses operating here, hosted by the American Chamber of Commerce in South Korea (AMCHAM), Finance Minister Choo Kyung-ho said South Korea is willing to settle pending issues based on the mutual trust between the two countries.

“Concerning the IRA and the Chips Act, we will seek harmonious solutions to ensure a mutually beneficial and future-oriented development of the bilateral ties,” Choo said.

The U.S. Inflation Reduction Act gives up to US$7,500 in tax credits to buyers of electric vehicles assembled only in North America, sparking concerns that Hyundai Motor and its smaller affiliate Kia Corp. could lose ground in the U.S. market, as they make their EVs at domestic plants for export to the U.S.

The finance minister noted that U.S. businesses pledged to invest $8.7 billion, more than any other country, in South Korea in 2022, reflecting their strong confidence over the resilience of Asia’s No. 4 economy.

South Korea will make efforts to help U.S. businesses maintain their business operations stably by beefing up bilateral ties in trade, supply chains, foreign exchanges and high-tech sectors, he added.

Choo asked U.S. businesses to continue making significant contributions in bolstering bilateral ties.